Prowse v. Nwankwo

United States District Court, D. New Jersey

May 2, 2014

HECTOR PROWSE, Appellant,v.MBAZULIKE NWANKWO, Appellee.

OPINION

SUSAN D. WIGENTON, District Judge.

Before this Court is pro se Appellant Hector Prowse's ("Appellant") appeal from a decision of the United States Bankruptcy Court, District of New Jersey, entered on August 26, 2013. In this decision, the Bankruptcy Court ordered that the real property located at 3 Huntsville Road, Andover, New Jersey ("Andover Property") was abandoned as of June 19, 2013 after finding that Mbazulike Nwankwo's ("Appellee") trustee satisfied the burden of demonstrating that said property is of inconsequential value to the bankruptcy estate.

This Court has jurisdiction to hear appeals of final judgments and orders of the Bankruptcy Court pursuant to 28 U.S.C. § 158(a)(1). This Court, having considered the parties' submissions, decides this matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons stated below, this Court affirms the Bankruptcy Court's Order.

Appellant claims that he is owed monies for unpaid working salaries, holidays, medical and dental benefits, working overtime, vacation time, sick days, construction assessment reports, and bi-weekly paychecks. Appellant claims that he filed suit against "MBA" and "Concost" in New York and New Jersey and won judgments against Appellee. After successfully obtaining judgments against Appellee, Appellant claims that he put a lien on one of Appellee's properties.

Thereafter, Appellee filed for Chapter 7 Bankruptcy. In connection with Appellee's bankruptcy proceedings, on June 17, 2013, the Honorable Rosemary Gambardella, U.S.B.J. for the District of New Jersey ("Judge Gambardella") heard oral argument regarding Appellee's filing of a notice of intention to abandon the Andover Property. On August 26, 2013, Judge Gambardella issued an Order abandoning the Andover Property having concluded that Appellee's trustee satisfied his burden of demonstrating that the Andover Property is of inconsequential value to the bankruptcy estate.

On February 27, 2014, Appellant filed the instant appeal. No opposition brief was filed. This Court notes that the June 17, 2014 hearing transcript was not provided to this Court by Appellant as directed in this Court's February 27, 2014 text order. Nevertheless, in the interest of efficiency, this Court has obtained the audio file from the June 17, 2014 hearing and has analyzed it before issuing this Opinion.

II. LEGAL STANDARD

This Court reviews the Bankruptcy Court's "factual findings for clear error and its exercise of discretion for abuse thereof." In re American Pad & Paper Co., 478 F.3d 546, 551 (3d Cir. 2007) (internal citations omitted); see also Fed.R.Bankr.P. 8013. A factual finding is clearly erroneous if, in reviewing all the evidence, the reviewing court is left with the "definite and firm conviction that a mistake has been committed, " even if there is evidence to support the finding. In re Allegheny Int'l, Inc., 954 F.2d 167, 173 (3d. Cir. 1992) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948)). "A bankruptcy court abuses its discretion when its ruling is founded on an error of law or a misapplication of law to the facts." In re O'Brien Environmental Energy, Inc., 188 F.3d 116, 122 (3d. Cir. 1999). Additionally, this Court "is limited to review of the evidence before the Bankruptcy Court and which was made a part of the record at the time the [] decision was rendered." Matter of Halvajian, 216 B.R. 502, 509 (D.N.J. 1998) (stating that "in deciding the current appeal, [the] Court will disregard any pleadings not in the record before the Bankruptcy Court, in addition to any facts not supported by citations to the record").

III. DISCUSSION

The bankruptcy court may order the Trustee to abandon property of the estate if it is "burdensome to the estate or... of inconsequential value and benefit to the estate." See 11 U.S.C. § 554(a)-(b). Abandonment is only permitted after notice and a hearing. Id .; see also 11 U.S.C. § 102(1)(A); Fed.R.Bankr.P. 6007.

During the June 17, 2013 oral argument, Judge Gambardella stated that the legal standard for abandonment of real property is derived from In re Slack, 290 B.R. 282 (Bankr. D.N.J. 2003), aff'd, 112 F.Appx. 868 (3d Cir. 2004). She interpreted Slack as allowing her to defer to the good faith business judgment of the Trustee in deciding whether or not real estate should be abandoned under 11 U.S.C. § 554. (Oral Argument, In re Mbazulike Nwankwo, Bankr. No. 2:13-cv-13271, at 10:56am (Bankr. D.N.J. June 17, 2013).)

Judge Gambardella applied the Slack standard solely to the abandonment of the Andover Property. In doing so, she deferred to the Trustee's reliance on a comparative market analysis of the Andover Property conducted by Weichert Realtors which valued the Andover Property at approximately $485, 000.00.[2] However, there were unpaid liens on the Andover Property totaling $983, 872.95.[3] (Oral Argument, In re Mbazulike Nwankwo, Bankr. No. 2:13-cv-13271, at 10:53am (Bankr. D.N.J. June 17, 2013).) Because the property was financially underwater, the Trustee recommended that the bankruptcy court allow for the Andover Property to be abandoned as permitted by 11 U.S.C. § 554. ( Id. ) Judge Gambardella recognized that no parties present at the hearing ...

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